In a world of absolute strangers and migrant populations, Credit Score acts as a quick "short cut" for determining someone's responsibility. An employer or potential business partner (or spouse) might want to have a look at your credit rating to try and predict what kind of person you are with your money & obligations. A "good" credit score speaks for itself, a "bad" credit score needs to be explained because it acts as a red flag that something about the person is off. This is one of the reasons why people who had bad credit in the past are often obsessed with establishing good credit even if they don't plan on borrowing money.

I wouldn't assume that someone with bad credit is a bad person, or a person with good credit is a good one, but without knowing more, if you were to make a guess, the person with bad credit doesn't have their act together and the person with good credit does.

In a world of absolute strangers and migrant populations, Credit Score acts as a quick "short cut" for determining someone's responsibility. An employer or potential business partner (or spouse) might want to have a look at your credit rating to try and predict what kind of person you are with your money & obligations. A "good" credit score speaks for itself, a "bad" credit score needs to be explained because it acts as a red flag that something about the person is off. This is one of the reasons why people who had bad credit in the past are often obsessed with establishing good credit even if they don't plan on borrowing money.

I wouldn't assume that someone with bad credit is a bad person, or a person with good credit is a good one, but without knowing more, if you were to make a guess, the person with bad credit doesn't have their act together and the person with good credit does.

OK, that makes sense.

I wonder, though, what about older people, many of whom are still alive who never, ever had a credit card, or took out a mortgage, etc?

I had an uncle like that--he never had even one credit card, always bought his cars with cash, he even bought his house in 1960 with cash! He survived the Great Depression, and people like that believed strongly in only buying what you had the cash to pay for.

I wonder, though, what about older people, many of whom are still alive who never, ever had a credit card, or took out a mortgage, etc?

I had an uncle like that--he never had even one credit card, always bought his cars with cash, he even bought his house in 1960 with cash! He survived the Great Depression, and people like that believed strongly in only buying what you had the cash to pay for.

I guess he had a zero credit rating?

I don't know how their credit rating would be calculated.

What I would know, if I ran their credit report, is that they have no unpaid bills for 7 or so years, no bankruptcies for 10 years, no Unlawful Detainers, no foreclosures, no uncollected judgments, no recent unpaid utility bills,

If a person has "no" credit record, you might suspect that they are using a false Social Security Number or Name, or both. If a person is young then that might make sense, when a person is old, it might be useful to make sure that the age matches up. Its not uncommon for people with bad credit (and illegal aliens) to use the social security of a child with the same name when submitting a SSN as part of a credit check.

Of course cash is king, if you have cash you never need to ask for credit.

In every transaction there is a person who takes a risk and a person who has to be trusted. If you are the one taking the risk, would you trust someone with bad credit, or absolutely no credit history? All else being equal, if you have to choose between two people, one with great credit, and one with bad, which would you choose?

Like I said, its a short cut for people who have to make decisions in a world without any social foundations.

There is evidence that high credit scores correspond to above average IQs. So, some companies evaluate job candidates with credit scores. Rental car companies will sometimes not rent to low credit score customers. Insurance companies will sometimes base rates using credit scores. Low credit score folks often have more accidents and are more prone to injuries.

I don't know if giving poor people credit is helping them. I think every person who wants it should be given an acre of land to live on, mortgage free and property tax free. Someplace where he could put his cardboard box, build a shanty, put a trailor or build a home. Most people can afford to buy a 12 by 60 trailor for $3000 or so within a 2 year time. Putting them in the position to do so is helping the poor, not giving them a monthly payment they can't make.

Subprime mortgages have hurt us all, albeit through government accomdation.

[FONT=Verdana]There is evidence that high credit scores correspond to above average IQs.

Sounds plausible to me. I have no credit score (since I never bought anything on credit in the twelve years I was in the USA). On the other hand, my IQ is a paltry 62 -- which lends credence to your theory.